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Tue December 27, 2011
The Undertakers Of The Retail Industry
When the internet kills a big box retailer, Gordon Brothers is the undertaker.
"They're stuck with selling the things that are inside the box," says bankruptcy lawyer Steve Jakubowski.
Gordon Brothers specializes in retail liquidations. When a store dies, they put on a suit, greet the guests and sell them whatever remains. And that means everything — not just books and clothing and DVDs, but shelves, lighting fixtures, even the chairs.
The liquidators can make a lot of money off the stuff inside the box. Jakubowski says when Borders was liquidated, liquidators bought the merchandise at 72 percent off inventory cost to Borders.
"But remember when they sell it at retail, let's just assume that everybody marks it up double, " says Jakubowski.
Any deals that the store was already offering, the liquidators erase that and start from the top. As the days tick by to closing, the price is methodically slashed.
One thing the liquidators don't have is their own staff to run the store or their own accounting department to pay out the last checks. They use the staff of the store that's closing.
Sym's is a sister brand of Filene's Basement, and they're going out of business together. Teresa Soto worked at Sym's in Secaucus, NJ for 23 years. Here last day was a week ago, and she told me there was one thing she wanted to get at her store's liquidation sale.
"I think I'm going to buy my chair, " said Soto. Soto worked in the store's accounting department, and she sat in the same chair for decades.
Right now is a perfect moment for a liquidator. The economy is bad enough that big companies are going out of business, but good enough that customers will come and buy the stuff that's for sale. Of course, it's not a perfect moment for anyone to be out of a job.